1077552--3/18/2008--GENTEK

related topics

{debt, indebtedness, cash}

{cost, regulation, environmental}

{acquisition, growth, future}

{stock, price, share}

{customer, product, revenue}

{product, market, service}

{cost, contract, operation}

{loan, real, estate}

{condition, economic, financial}

{operation, natural, condition}

{loss, insurance, financial}

Risks Related to the Company s Capital Structure The Company s ability to make payments on its debt will be contingent on GenTek s future operating performance, which will depend on a number of factors that are outside of its control. The Company is subject to restrictive debt covenants pursuant to its indebtedness. These covenants may restrict its ability to finance its business and, if the Company does not comply with the covenants or otherwise default under them, the Company may not have the funds necessary to pay all amounts that could become due and the lenders could foreclose on substantially all of its assets. The Company may be required to prepay its indebtedness prior to its stated maturity, which may limit its ability to pursue business opportunities. The Company s business is capital intensive. It cannot assure you that it will have sufficient liquidity to fund its working capital and capital expenditures and to meet its obligations under existing debt instruments. The Company is a holding company that is dependent upon cash flow from its subsidiaries to meet its financial obligations; its ability to access that cash flow may be limited in some circumstances. Risks Related to the Company s Operations The industries in which the Company operates are highly competitive. This competition may prevent it from raising prices at the same pace as its costs increase, making it difficult for the Company to maintain existing business and win new business. The industries the Company competes in are subject to economic downturns. The Company may experience increased costs and production delays if suppliers fail to deliver materials to the Company or if prices increase for raw materials and other goods and services that it purchases from third parties. The Company s revenues are dependent on the continued operation of its manufacturing facilities, and breakdowns or other problems in its operations could adversely affect its results of operations. A significant portion of the Company s revenue and operating income from its valve actuation systems segment has been, and is expected to continue to be, concentrated in a small number of customers. Material changes in pension and other postretirement benefit costs may occur in the future. In addition, investment returns on pension assets may be lower than assumed, which could result in larger cash funding requirements for the Company s pension plans, which could have an adverse impact on the Company. The Company s principal businesses are subject to government regulation, including environmental regulation, and changes in current regulations may adversely affect it. The production of chemicals is associated with a variety of hazards, which could create significant liabilities or cause the Company s facilities to suspend its operations. The seasonal nature of the water treatment and chemical processing businesses could increase the Company s costs or have other negative effects. The Company may not be able to obtain insurance at its historical rates and its insurance coverage may not cover all claims and losses. The Company is dependent upon many critical systems and processes, many of which are dependent upon hardware that is concentrated in a limited number of locations. If a catastrophe were to occur at one or more of those locations, it could have a material adverse effect on its business. The Company cannot predict the impact of any asset or business disposition. The Company has recently completed several acquisitions and may continue to pursue new acquisitions or joint ventures, and any such transaction could adversely affect operating results or result in increased costs or other operating or management problems. The Company remains subject to the ongoing risks of successfully integrating and managing the acquisitions that have been completed. The Company may be unable to identify liabilities associated with the properties that may be acquired or obtain protection from sellers against them. Risks Related to The Company s Common Stock The market price of the Company s common stock is subject to volatility. The exercise of the Company s Tranche B and Tranche C warrants could create substantial dilution, or there may be other events which could have a dilutive effect on its common stock.

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1077552--3/18/2008--GENTEK_INC